Live for today, but plan for your future retirement – are you saving enough, and looking after your health?
UK life expectancy has failed to improve for the first time since 1982, according to figures from the ONS released yesterday.
However, life expectancy remains relatively high for both women and men, at 82.9 years and 79.2 years respectively. But how can we ensure that our later years will be happy, healthy and, ultimately, affordable?
Today, we have more years to enjoy than previous generations, and our expectations of retirement are high. Older people are living later-life to the full – starting businesses, realising ambitions, and going on amazing holidays – and non-retirees have similar aims for when they retire.
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As today’s 40-year-olds reach their 70s, this trend of wanting to enjoy an active retirement will only continue to grow. Yet many people don’t start saving soon enough to fund those extra years, or take steps to ensure that they arrive there in good health.
Pensions Awareness Day earlier this month was a useful reminder for people to keep one eye on their later life plans, but there is clearly more work to be done.
Existing saving products don’t encourage people to get into good habits today for a more fulfilling future. There is an urgent need for solutions that address our long-term health and finances.
I believe that the way forward is a unique approach founded on positive behavioural change that brings together saving and wellness. By changing behaviour, we can produce economic and health benefits, which are good for the individual, good for us as a business, and good for society as a whole. We call this shared value.
People tend to choose smaller, immediate rewards rather than larger, later rewards. By understanding these biases, companies can better design products and services that go with the grain of human behaviour.
At Vitality, we deliver positive behavioural change through our shared value model. We offer healthy living discounts on high street brands to encourage people to engage with their health, and provide incentives such as savings boosters to reward that engagement, all of which helps to develop healthy long-term habits.
Against the backdrop of longer life lived in poverty and poorer health, there is an immediate need for new solutions that support savers in preparing for tomorrow.
By understanding the basics of behaviour and acknowledging the changing savings market, investment providers can help people ensure that their later-life dreams become reality.
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